Knowing the law, trusting the state: legal literacy and investor confidence in Vietnam’s digital asset market
Thanh-Sang Nguyen, Yen Nhi Le DoPurpose
Despite the rapid expansion of cryptocurrencies and other digital assets, Vietnam’s young digital asset market has witnessed a lack of robust regulatory frameworks. This study examines how legal knowledge, trading behavior and prior risk experience shape legal risk exposure and trust in government oversight.
Design/methodology/approach
Structural equation modeling was carried out on a sample of 224 investors to analyze the relationships between legal knowledge, trading frequency, prior risk experience, legal risk exposure, perceived legal risk and trust in government regulation.
Findings
Greater legal knowledge dampens exposure to legal risks while strongly strengthening perceived legal risks. Trust in government regulation is significantly enhanced by both perceived and actual legal risks. High trading frequency increases exposure to legal risk, while prior negative experiences weaken the relationship between risk exposure and trust in government oversight.
Practical implications
The paper provides practical insights for lawmakers when building Vietnam’s new digital asset regulatory frameworks, emphasizing the need for holistic investor education, transparent regulations and robust consumer protection mechanisms.
Originality/value
The study offers empirical evidence from an emerging digital asset market, highlighting how legal knowledge and risk experiences jointly shape investor trust in government oversight under regulatory uncertainty.